Obamacare breaks promises in California, and supporters would prefer you not point it out

posted at 9:21 pm on June 4, 2013 by Mary Katharine Ham

You may have heard tell of some good news about health care premiums out of California recently.

Depends on what the meaning of good is. If good is better than “worst-case gloom-and-doom scenarios,” or premium hikes slightly smaller than catastrophic rate shock predictions, then sure, maybe. If you’re one of the millions of Americans who was promised they could keep their insurance if they liked it, and their health insurance premiums would go down, the news may not qualify as good for you.

President Barack Obama and his supporters sold Obamacare as a plan to cover everyone while bringing down health insurance premiums and government health care spending. Anyone who expressed skepticism that the bill could offer more coverage to more people for less money or pointed out possible unintended consequences was maligned as a partisan liar. Now that it turns out, yes, more coverage for more people requires many people to pay more money, Obamacare supporters are simply asserting this is a great trade-off and they shouldn’t be held to the promises they made about Obamacare’s outcomes.

But the bill would never have come close to passing if it had been pitched as a giant overhaul of a system some most Americans were mostly happy with, imperfect though it was, to cover a sliver more people for a bunch more money. Hey, great trade-off!

Amid anxiety over rising costs from the federal healthcare law, California received better-than-expected insurance rates for a new state-run marketplace, but many consumers still won’t be spared from sharply higher premiums.

Developments in California are being watched carefully around the country as an important indicator of whether the healthcare law can deliver on its promise to expand health coverage at an affordable price. Many Republicans, insurance executives and other critics of the law have been warning that consumers are in for a shock next year when insurance companies raise rates to comply with the law’s many new requirements.

Supporters were upbeat after an initial look at the proposed premiums, while critics remain unimpressed.

“These rates are way below the worst-case gloom-and-doom scenarios we have heard,” said Peter Lee, executive director of Covered California, the state agency implementing the healthcare law. “But let’s be clear, some consumers will have prices that go up. There may be some sticker shock.”

If you’re a 25 year old male non-smoker, buying insurance for yourself, the cheapest plan on Obamacare’s exchanges is the catastrophic plan, which costs an average of $184 a month. (By “average,” I mean the median monthly premium across California’s 19 insurance rating regions.)

The next cheapest plan, the “bronze” comprehensive plan, costs $205 a month. But in 2013, on eHealthInsurance.com (NASDAQ:EHTH), the median cost of the five cheapest plans was only $92.

In other words, for the typical 25-year-old male non-smoking Californian, Obamacare will drive premiums up by between 100 and 123 percent.

Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan. So if you’re 40, your cheapest option is the bronze plan. In California, the median price of a bronze plan for a 40-year-old male non-smoker will be $261.

But on eHealthInsurance, the median cost of the five cheapest plans was $121. That is, Obamacare will increase individual-market premiums by an average of 116 percent.

The key thing to remember is that back when Obamacare was being debated in Congress, Democrats claimed that it was right-wing nonsense that premiums would go up under Obamacare. “What we know for sure,” Obamacare architect Jonathan Gruber told Ezra Klein in 2009, “is that [the bill] will lower the cost of buying non-group health insurance.” For sure.

In 2009, was Ezra saying that it’s ok that premiums will double for the average person, because a minority of people will pre-existing conditions will benefit? No.

Earlier that year, AHIP, the private insurer trade group, commissioned a report from PriceWaterhouseCoopers to analyze the impact of Obamacare on health insurance premiums in the individual market. That report, which I reviewed here and elsewhere, found that the version of Obamacare then being considered by the Senate Finance Committee would increase premiums by 14 to 32 percent, depending on the year you looked at. In retrospect, the PwC report was a bit optimistic.

But Ezra described the PwC analysis as “the insurance industry’s deceptive report,” comparing it to sham research put out by the tobacco industry and Big Oil.

The briefings from pro-Obamacare groups did not suggest that it would achieve some fairly trivial cost reductions, with the bulk of the work on cuts still to be done in some successor bill. They emphasized the historic achievement and presented 10- or 15- year estimates that made the reductions sound very large. An average reader who did not spend all day steeped in these debates–and I include Congressmen in that group–could be forgiven for coming away with the impression that Obamacare was going to deliver a twofer: coverage expansion and a permanent solution to the nation’s health care cost problem.

Many a company has ended up in a disastrous merger the same way.

So it’s a shame that we only started hearing about the need for further, much more drastic action on spending after Obamacare had passed. Unfortunately, we apparently had to pass the bill in order to find out what wasn’t in it.

Lower-income individuals, meanwhile, will be insulated from the full impact of those new rates thanks to the law’s premium subsidies. Yet as health policy consultant Robert Laszewski points out, what that really means is that a big chunk of Obamacare’s cost increases will fall on taxpayers. (And remember, an estimated 40 percent of people buying insurance through the exchanges won’t get subsidies.)

There are other trade-offs too: As Laszewski also points out, health insurers are attempting to mitigate the costs imposed by the benefit requirements by offering narrow-network plans that limit the scope of providers covered. There’s nothing wrong with those sorts of offerings, if insurers want to sell them and consumers want to buy them, but what Obamacare appears to be doing is giving both consumers and insurers a rather big push toward those sorts of provider-limited plans. Essentially, it’s making the choice for them.

Fundamentally, that’s a big part of what Obamacare is about: making choices for individuals, for businesses, and for the health care sector. And so under Obamacare we’ll probably get more coverage (though perhaps not as much as supporters hope, especially at first), more insurance benefits (at least on paper), and (at least in theory) more accessible coverage. But don’t be fooled into thinking it won’t come without higher costs—for individuals, for businesses, and for the public. Obamacare both makes those choices and expects people to pay for them.

If only we’d heard about it three years ago. Obamacare supporters now argue that critics’ arguments against it focus too much on the downsides, abandoning the nuance and caveat necessary to show the law’s progress in its proper light. The problem is they sold a bill, without allowance for nuance or caveat, on the claim that it had no downsides. Now they have to answer for them.

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In Utopia…
You will be questioned by the IRS on the amount of motorcycle exhaust you inhaled….

And then write this on line 10a..
Then subtract this from your Adjusted Gross Income…
And if lower then line 8c..
port this number over to The Affordable Care Form and refer to Table 25d for your adjusted effected healthcare rate…

Obamacare breaks promises in California, and supporters would prefer you not point it out

One of those supporters would be Brayam, who should be banned if Obamacare doesn’t deliver on his pledge, ie, ‘we can cut the average family’s premium by about $2500 a year.’

PS: The cost of the lowest Obamacare policy, the Bronze package, will cost a family of 5 $20,000…but don’t worry: Merriam-Webster’s has redefined both ‘free’ and ‘affordable’ to reflect the ‘necessarily skyrocketing’ insurance premiums.

S: The cost of the lowest Obamacare policy, the Bronze package, will cost a family of 5 $20,000…but don’t worry: Merriam-Webster’s has redefined both ‘free’ and ‘affordable’ to reflect the ‘necessarily skyrocketing’ insurance premiums.

S: The cost of the lowest Obamacare policy, the Bronze package, will cost a family of 5 $20,000…but don’t worry: Merriam-Webster’s has redefined both ‘free’ and ‘affordable’ to reflect the ‘necessarily skyrocketing’ insurance premiums.

Resist We Much on June 4, 2013 at 9:45 PM

$16,000 for a family of three..
But who is counting when all is lost…

Electrongod on June 4, 2013 at 9:47 PM

There ya go, then! Be a family of three instead of a family of five, and you save $4000. That’s even better than Obama’s assertion his plan will save a family $2500 a year. Wow! He was right!

“These rates are way below the worst-case gloom-and-doom scenarios we have heard,” said Peter Lee, executive director of Covered California, the state agency implementing the healthcare law. “But let’s be clear, some consumers will have prices that go up. There may be some sticker shock.”

In other words:

It’s possibly not quite as bad as the worst possible outcome by a stitch, so let’s stick our heads in the sand and celebrate that dubious distinction.
Never mind that middle-class families will be paying out the bunghole WAAAAAY more than previously, and that singles of a youthful age will be paying EVEN MORE STILL.

Never mind that this is all being shoved down our throats by a band of boobs so stupid that they fell for an argument so sadly laughable as Nancy’s “we’ve got to vote for it so we can see what’s in it” nonsense.

Never mind that the media never bothered to run the numbers, and never mind that when anyone else did run the numbers, the media stuck their collective fingers in their ears.

Seems like the generous subsidy program never gets mentioned in these articles. Yes, taxpayers are paying for it, but at least people need to be reminded of the subsidies that cover incomes up to 400% of the poverty line (which takes in approx. 80% of all citizens).

Considering that Obamacare was designed to fail, this should come as a surprise to nobody…except, of course, the LIVs.

Left Coast Right Mind on June 4, 2013 at 9:43 PM

Those damn republicans and their scaremongering screwed up implementation of the bill, coupled with those fat-cat insurance companies who found a way to screw hard working, middle class Americans. Whelp, I guess we have no choice but to go single payer. See what you did to us, extreme republicans and greedy capitalists? /sarc

In fact, if you want to get covered for, let’s say a cardiac cath, you better claim that you’re a Democrat atheist, illegal…er…undocumented immigrant, transgendered person of color who needs the cath so that you can be in good enough shape to get pregnant and have a partial birth abortion. Show up for your appointment cuffed and in an orange jumpsuit- tell them you’re standing trial for killing a member of the Tea Party.

Considering that Obamacare was designed to fail, this should come as a surprise to nobody…except, of course, the LIVs.

Left Coast Right Mind on June 4, 2013 at 9:43 PM

Those damn republicans and their scaremongering screwed up implementation of the bill, coupled with those fat-cat insurance companies who found a way to screw hard working, middle class Americans. Whelp, I guess we have no choice but to go single payer. See what you did to us, extreme republicans and greedy capitalists? /sarc

tdarrington on June 4, 2013 at 10:09 PM

Exactly. The plan – or the contingency plan, in the unlikely but possible event they actually believed ObamaCare would work – was to run the insurance companies out of business, foul up the system so bad as to create a “national emergency” which could only be addressed by a single-payer system, or what they really wanted the whole time.

Ezra Klein is a lying propagandist. He designed the Journ-O-List to deceive, to manage the way facts are reported to the public. Goebbels would be proud of the little skunk.

With the mega high deductibles in these plans the insurance company’s won’t be paying many claims unless the health issue is major.Lots of profit in this bill.
docflash on June 4, 2013 at 10:25 PM

Yep. It’s not the premiums alone that will cause sticker shock. In fact, IF there are ever exchanges to buy coverage from in Texas, and that’s a BIG if, my premiums don’t look like they’ll change much. But, my OOP looks to go from $2500 to well over $12,000. Thanks but no thanks. I’ll pay cash for doc visits and the yearly penalty, until I need something much more costly done, then I’ll sign up. Again, that’s IF there are any exchanges from which to buy coverage. And I hope there are never exchanges set up.

With the mega high deductibles in these plans the insurance company’s won’t be paying many claims unless the health issue is major.Lots of profit in this bill.
docflash on June 4, 2013 at 10:25 PM

This. The subsidies (paid for by us taxpayers not the government”s magic money tree) only cover premiums. But the deductibles for these fabulous new plans are very high and the bronze plans have a 40% copay. No subsidies for those expenses, so literally people will have a fancy new plan they can’t afford to use, or in other words, will have what is in effect a catastrophic plan (because most people will have to have catastrophic expenses to ever get any real benefits) at Cadillac prices.

So now that we see how well the Democrats are doing with healthcare today, what will you DO?

2012 was another case-in-point of how the GOPe refuses to do squat about Obamacare. It also proves how little the typical voter is willing to do to get a decent REPRESENTATIVE government put in place. Today Americans are getting what they’ve EARNED.

Only the shut-ins could have missed how Karl Rove and his GOPe buddies plan on pushing the weak kneed, establishment approved candidates who might as well be John McCain clones on us. Does that matter, and if so what will YOU DO to fight that?

Right now the TEA Partys are gearing up for 2014. They won’t become dependent on the party of fail. They are working to create TEAnami 2014, the effort to bring back the GOP which once represented us.

What are you going to do? The train is getting ready to leave. Will you sit on the tracks again after seeing how well that worked out for you last time?

Since the ultimate goal is single payer this is bound to work. Won’t the 25 year old non smoker just pay the fine and get public health care? Good thing California has a budget surplus that their legislature is trying to spend. And it won’t be on healthcare.

Since the ultimate goal is single payer this is bound to work. Won’t the 25 year old non smoker just pay the fine and get public health care? Good thing California has a budget surplus that their legislature is trying to spend. And it won’t be on healthcare.

Cindy Munford on June 5, 2013 at 9:10 AM

Yes, but that will be short term, as soon as they see they are losing money, the will up the fine, or force mandatory community service, to pay for that extra costs.

If the government can make one vital product, that is difficult to live your life without, that is the one product they will use to control the population…all for the common and good welfare of the people, of course, who would ever think differently.

The problem is they sold a bill, without allowance for nuance or caveat, on the claim that it had no downsides. Now they have to answer for them.

No they don’t. They’ll just claim everything is working fine, and every time a problem is brought up and proven to exist they’ll just blame the gop. And it’ll work yet again.

This will be most clear when we end up being right about everything else we said would happen after this crap was passed. Now the biggest thing we were right about was the premiums skyrocketing, and we were more right than even we knew.

Next we’ll be proven right about the lack of available healthcare, of any quality, to the poor in particular. And no one will remember that we predicted it and warned about it. They will only remember that it’s all OUR fault. Because that’s all they’ll hear at the time. Just like now.

Then we’ll be proven right about the general downgrading of the quality of healthcare across the board. It won’t matter how rich you are, the best and brightest health care providers will leave the game rather than be treated like govt bureaucrats, leaving the worst and least experienced as the only options. Just like we predicted. And we’ll still get the blame. And it’ll work like it always works.

There ya go, then! Be a family of three instead of a family of five, and you save $4000. That’s even better than Obama’s assertion his plan will save a family $2500 a year. Wow! He was right!

Liam on June 4, 2013 at 9:56 PM

Don’t think this is not part of the plan. Progressives hate big families and want to penalize them. That’s also one reason why forcing insurance coverage for birth control and abortion is so important to them. That’s the “choice” they really want to give women – have a “free” abortion or pay $2000 more a year for your required Obamacare insurance.

The dems have this phrase that the only thing that conservatives hate about big government is that they can’t manage it (like Dems can, obviously). But management is planning, prediction and execution. If things don’t turn out like you predicted, its all monkeys on tigers.

The left’s attitude is that if you wake up tomorrow morning and the world’s still here, no matter what they screwed up, you owe Obama praise for the difference between their screw-up and nuking the world out of orbit.

It must be frustrrating to be a donk in Congress right now or a donk pundit, because they have to know that ObamaCare is working exactly as intended — destroying the system of private health insurance by exploding costs, thereby opening the door to an eventual full-scale government takeover of the entire healthcare system — but they can’t come out and brag about their unqualified “success” in this regard, because they were lying all along about their real intention.

It’s no different from the guy who wants a new car, but his wife says that they can’t afford one, so he purposefully gets into an accident with it while she’s in the passenger seat, claiming all along that by swerving into the tree he was really doing her a favor by avoiding something worse.

Then, he takes the insurance settlement and buys that new car. Sure, it costs more than the settlement value, and the car payments beyond the settlement amount are more than he and his wife can really afford, and it sucks more gas, and sure, his auto insurance premiums went up, too; but he got that new car… and eventually she’ll come around to appreciate the fact that it comes with a moon roof, right?

Under Obamacare, only people under the age of 30 can participate in the slightly cheaper catastrophic plan.

And this, in turn, after being on the parents’ (also non-catostrophic) plan until age 26. So, there’s only a four-year window of your entire life in which you can even TRY to do your health care this way.